The General Motors Corp., Toyota Motor Corp., and the Ford Motor Co. have one thing in common - the declining auto sales. Detroit's automakers suffered sales declines in April as fading consumer confidence and increasing gasoline prices cramped demand for new autos.
GM sales slashed by 9.5 percent, and Ford dived 13 percent from April 2006, pulled decreasing sales of big pickup trucks. Toyota fell by 4.3 percent, for its first monthly decrease in two years. Additionally, the Honda Motor Co., Ltd. reported a 9.1 percent decline. It seems that even could not camouflage the auto sales spill.
Among the auto giants, only DaimlerChrysler AG, the German automaker, posted a gain. Industry sales fell by 7.6 percent. By far, the figure is Daimler's biggest decline of the year and the third in four months. Analysts in the industry have forecast the April slide, citing the rise of gasoline prices, a weak housing market in the United States, waning consumer confidence and curb in sales to rental fleets.
"Gas prices are clearly a big issue," as is consumer confidence in general, said Alan Baum, the director of automotive forecasting at Planning Edge in Birmingham, Michigan. "So we're seeing people starting to hold back."
In April this year, there were only 24 selling days, two fewer than the prior year. Bloomberg and other automakers report unadjusted comparisons, which are approximately eight percentage points lesser than the percentages based on adjusted figures.
DaimlerChrysler, led by Chrysler Group's Jeep brand, had a surprise one percent increase. Asian automakers collectively sold 529,808 vehicles in the United States last month and that amount is a 7.9 percent cut from that of 2006. In addition, sales of all Asian automakers decline except for the Mitsubishi Motors Corp., which reported an eleven percent gain.
In April, a total of 1.34 million vehicles were sold, pulling sum for the year 2.9 percent lower than the same period last year. Analysts in the industry consider the sales doldrums a big threat to GM's, Ford's and Chrysler's turnaround plans that are designed to cope from losses in the previous year. Each is cutting production, reducing costs, slashing jobs, and closing plants to recover. Some automakers have trimmed low-profit sales to rental-car companies, which purchase in bulk at a discount.
"It's definitely shaping up to be the weakest month of the year," said Jim Sourges, a Detroit-based analyst for the Paris consulting firm Cap Gemini SA. "The question is, will it continue? I think it's too soon to tell."
Ford, the second-biggest Detroit automaker, earlier adjusted its incentive program for May and June. The adjusted program includes a choice of five-year, no-interest loans or a $3,000 rebate on the F-150 pickup truck. Chrysler, on the other hand, is offering five-year, interest-free loans or rebates of as much as $5,000 on most of its product lines.
In April, GM's sales of light vehicles declined to 307,554, paced by a fourteen percent decline in its best-selling vehicle - the Chevrolet Silverado large pickup. Car sales for the biggest American automaker dropped ten percent.
GM's retail sales, excluding those to fleet customers, fell about four percent, without a sales-day adjustment, the automaker's sales analyst, Paul Ballew, said on a conference call. The average transaction price rose by $1,000, and incentives fell by about $350 to $2,500 per car and truck, and this would be meaning more profit per vehicle, Ballew said. "A strong labor market and other positive economic factors are helping offset housing declines in markets such as California and Boston. I expect GM retail sales to be stable. It's not clear whether GM will be able to boost its retail share for the year."
Lincoln and Land Rover are the only divisions of Ford that posted sales gains in April, with increases of 6.9 percent and 13 percent, respectively. All Ford-brand vehicles had sales declines, except for the Expedition sport-utility vehicle and Crown Victoria sedan.
Toyota's two most popular vehicles, the Corolla and Camry, combined for an 8.1 percent sales decline, the Toyota City, Japan-based company said. Honda's car sales fell 14 percent, including an 8.5 percent reduction for the Accord sedan.
The Chrysler's two percent gain to 193,104 vehicles was greatly influenced by the 29 percent gain of its Jeep brand, including a 75 percent increase in Wrangler SUV sales.
According to Bloomberg data, car and light-truck sales dropped to an annual rate of 16.3 million. The rate in April 2006 was 16.7 million.
